GBP/USD – Pound Inches Higher, Markets Eye British Mfg. Production

The British has ticked higher in the Thursday session. In North American trade, GBP/USD is trading at 1.3131, up 0.11% on the day. On the release front, there are no British indicators. In the US, unemployment claims climbed to 239 thousand, missing the estimate of 232 thousand. On Friday, the UK releases Manufacturing Production and the US publishes Preliminary UoM Consumer Sentiment.

The Brexit talks are moving slowly, and one major sticking point is the size of Britain’s divorce bill. The European Union is demanding EUR 60 billion, while Britain has countered with an offer for EUR 20 billion. Britain wants to move on to discussing a trade deal with the continent, but the Europeans are insisting on more progress on the divorce bill as well as on other non-trade issues. If the sides still remain deadlocked in December without no deal in sight, hardliners on both sides could derail the talks completely, which would send shivers up the spines of investors and hurt the British pound. The Europeans are also wary about the ability of Theresa May to deliver the goods, given her continuing struggles at home. Two ministers have been forced to resign from May’s cabinet in recent weeks, and May hasn’t been able to present a coherent Brexit policy to the Europeans or to the voters at home.

BoE Governor Mark Carney hasn’t shied away from public statements on Brexit, much to the angst of many lawmakers. Carney weighed in again on Brexit in a television interview on the weekend. Carney expressed concern at the lack of uncertainty over a final deal with the European Union, saying that the economy “should really be booming, but it’s just growing.” According to Carney, the BoE wants a scenario with a smooth transition out of the EU, with a trade deal that was somewhere in between full membership in a single market and a ‘no deal’ outcome. The BoE cut rates in August 2016, just after the Brexit vote. This reflected the Bank’s fear of a sharp downturn in the British economy, which did not occur. The BoE raised rates last week (for the first time since 2007), in what was widely viewed as a corrective measure to the August 2016 rate cut.

GBP/USD Fundamentals

Thursday (November 9)

8:30 US Unemployment Claims. Estimate 232K. Actual 239K

10:00 US Final Wholesales Inventories. Estimate 0.3%. Actual 0.3%

10:30 US Natural Gas Storage. Estimate 15B. Actual 15B

13:01 US 30-year Bond Auction

Friday (November 10)

4:30 British Manufacturing Production. Estimate 0.3%

10:00 US Preliminary UoM Consumer Sentiment. Estimate 100.8

*All release times are GMT

*Key events are in bold

GBP/USD for Thursday, November 9, 2017

GBP/USD November 9 at 11:50 EDT

Open: 1.3112 High: 1.3153 Low: 1.3085 Close: 1.3131

GBP/USD Technical

S1

S2

S1

R1

R2

R3

1.2904

1.3022

1.3122

1.3224

1.3347

1.3445

GBP/USD edged up in the Asian session and retracted in European trade. The pair has gained ground in North American trade

1.3122 has switched to a support role after slight gains by GBP/USD on Thursday. This line remains fluid

1.3224 is the next resistance line

Further levels in both directions:

Below: 1.3122, 1.3022, 1.2904 and 1.2811

Above: 1.3224, 1.3347 and 1.3445

Current range: 1.3122 to 1.3347

OANDA’s Open Positions Ratio

GBP/USD ratio is almost unchanged in the Thursday session. Currently, long positions have a majority (56%), indicative of trader bias towards GBP/USD breaking out and moving higher.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.

MarketPulse is a forex, commodities, and global indices analysis, and forex news site providing timely and accurate information on major economic trends, technical analysis, and worldwide events that impact different asset classes and investors.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.

Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. Losses can exceed investments.

OANDA (Canada) Corporation ULC accounts are available to anyone with a Canadian bank account. OANDA (Canada) Corporation ULC is regulated by the Investment Industry Regulatory Organization of Canada (IIROC), which includes IIROC's online advisor check database (IIROC AdvisorReport), and customer accounts are protected by the Canadian Investor Protection Fund within specified limits. A brochure describing the nature and limits of coverage is available upon request or at www.cipf.ca.

OANDA Europe Limited is a company registered in England number 7110087 limited by shares with its registered office at Tower 42, Floor 9a, 25 Old Broad St, London EC2N 1HQ and is authorised and regulated by the Financial Conduct Authority, No: 542574.

OANDA Asia Pacific Pte Ltd (Co. Reg. No 200704926K) holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore and is also licenced by the International Enterprise Singapore.

OANDA Australia Pty Ltd is regulated by the Australian Securities and Investments Commission ASIC (ABN 26 152 088 349, AFSL No. 412981) and provides and is the issuer of the products and/or services on this website. It's important for you to consider the current Financial Service Guide (FSG), Product Disclosure Statement ('PDS'), Account Terms and any other relevant OANDA documents before making any financial investment decisions. These documents can be found here.